The president/CEO of a struggling Florida credit union, now shopping for a second merger partner after one with the $1.2 billion MidFlorida FCU fell apart last week, is forecasting a sharp rise in small CU mergers in his state and elsewhere resulting from the NCUA assessment.
"I told our board the assessment was a death knell for us as a surviving credit union and that we needed to find a suitable merger partner," said Tom Randle, the head of the $220 million Sarasota Coastal CU, which at 5.1% capital lost $2.66 million in 2008 and $3.1 million in the first quarter including the NCUSIF expense.
The housing recession along Florida's West Coast "just like those in California, Arizona and Las Vegas" contribute greatly to the pickup in CU mergers, said Randle maintaining "I could write a book on what has gone on with so much of it not right."
The comments by Randle, a former secretary of the Florida Credit Union League, came as Sarasota Central directors called off a merger with MidFlorida of Lakeland after MidFlorida's board refused to take on two Sarasota directors on a combined CU, said Randle.
"It was a deal breaker," said Randle maintaining negotiations with MidFlorida had began last year and until the merger agreement last month it was understood the two Sarasota directors would join MidFlorida.
Officials of MidFlorida were not immediately available on the reasons for the change of heart.
Commenting on conditions, Randle said the "bursting of the house bubble in southwest Florida from Hillbrook all the way to Miami" has been severe with housing prices dropping 50% and the area now experiencing 10% unemployment.
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